Tuesday, December 07, 2010

Back during my college days, I was fortunate to be a co-author for a business case study that ended up getting published by Richard Ivey Publishing. The case had to do with the Vidalia Onions brand. Essentially, Vidalia Onions were known for being extremely sweet. However, as with any product, the sweetness varied per unit. Customers took a risk per onion, not knowing whether they onion they were purchasing was actually the sweetest they could get. Whether the onion ended up being sweet or not, they would have to pay the same price, and they would not find out how sweet the onion actually was until they ate the onion.

So an innovative entrepreneur decided to create a technology that could predict whether an onion was sweet or not. He then marketed this technology to farmers as a way for them to guarantee sweetness to their customers. Onions could be certified as real sweet Vidalia Onions. Most of the farmers were up in arms about this. Using the Vidalia brand name was the entrepreneur's tactical error, and has since been rectified. The farmers victoriously framed the issue as a brand ownership issue, but that didn't stop the world from changing. The original vision held true: a way for farmers to guarantee sweetness to customers, eliminating the customer's risk. The farmers who didn't get on board or find another way to compete would lose in the long term.

Before this certification technology came along, the Vidalia brand depended on trust, reputation, and customer acceptance (or resignation). But this technology decimated that brand power, and customers would come to trust the sweetness certification process much more than they would the brand. The proof of their reassigned trust was shown in market prices for certified sweet onions, which rose, while non-certified onion prices fell. This indicated that people were willing to pay to get value and avoid risk. That makes sense; it's why insurance is a viable business. Correspondingly, the corollary can be drawn that trustworthy information has value. Furthermore, with complete trustworthy information, people are much better equipped to make decisions and judgments, as long as they are able to intake, analyze, and understand the information efficiently.

This is why WikiLeaks is so interesting right now as an academic case study in information symmetry. WikiLeaks tries to blow wide open all information that very important people work very hard to keep from the public eye. They view themselves as the ultimate weapon to be wielded by the anonymous whistleblower. People can then make judgements about what is happening. It's good and bad for many reasons. But I'm not interested in that debate for the purpose of this blog post. I'm more interested in the effect that initiatives like WikiLeaks would hypothetically have on governments, corporations, and various institutions.

Like the Vidalia Onions certification technology case, WikiLeaks may just be an enabler that causes latent forces to viably demand governments to act with integrity and accountability. But if that were true, just like the Vidalia Onions case, it would cause the incumbent producers (i.e. governments, corporations, and other institutions) a lot of pain in the process for reformation. The blindsided ones would be caught scrambling to figure out what to do, with no real clue. Come on now, really? Restricting government workers from doing what everyone else on the planet has already been doing, especially given that many of those same government workers probably already perused the leaked cables?

But how powerful is WikiLeaks for real in the quest for inducing governments to be accountable? It would need to depend on the quality of information that was leaked. There are 4 possible categories for information quality with regards to leaked information:

Unbelievable Insanity: There really were alien experiments in Area 51, cancer is a man-made disease designed to enable population control, Jurassic Park is real, and heads of states will definitely be assassinated or impeached.

Sky is Falling: Watergate level fiascos, big problems, but nothing we can't fix if we work hard enough; maybe some heads of state will be impeached.

Not Surprising: Stuff that everyone suspected, but nobody could confirm, like the Chinese government driving the Google hacking incident; interesting, but business as usual, get on with your lives.

Waste of Time: Why is this news? Why are you wasting my time? Don't talk to me about this insignificant stuff.

WikiLeaks may have more hype than substance at the moment because most of the stuff that was revealed through the diplomatic cables would fall into categories 3 or 4. I'll just rip off these guys, it's easier:

Meanwhile, the organization has certainly discovered the art of over-promising, the latest Cablegate docs being a prime example. If there's anything scandalous in them, it's that the US government isn't evil enough. There's no talk of toppling foreign governments. No examples of breaking international law. No assassination talk. Nothing. Of course if you didn't bother to read any details, you'd think there had been some massive breach of America's dirtiest secrets that ripped the veil off the cloak and dagger world of the US diplomatic corps (of course, US politicians calling Wikileaks a "terrorist" organization only help to blow the docs out of proportion).

WikiLeaks would have the potential to really make an impact if it had the ability to leak Category 1 or 2 information. The fact that it hasn't demonstrates that either governments are very good at keeping Category 1 or 2 information under control, or that no Category 1 or 2 information exists in the first place. To have Category 3 or 4 information leak is embarrassing, but not devastating. In fact, some conspiracy theorists would argue that it's a carefully calculated ploy on the US government's part. That would be ironic: the weapon that is pointed at the government turns out to be a tool of the government. But that's only another conspiracy theory for now.

Whether WikiLeaks truly has the ability to induce more long-term accountability and integrity in governments is is yet to be seen, especially if it is true that governments are able to retain excellent control over their hypothetical Category 1 & 2 scandals. The sweetness certification technology enabled consumers to tell if a Vidalia onion was truly sweet with 100% certainty; that's how customers were able to demand and purchase only the real stuff. WikiLeaks does not enable a nation's population to tell if their government is being accountable in matters that really matter with 100% certainty; if anything, it may actually even decrease certainty by increasing noise. More noise in the equation leads to higher decision difficulty. This is especially true for the general population that doesn't have the time or patience necessary to really peruse and understand everything that was leaked and discriminate for the real signal while discarding the noise. WikiLeaks is probably an enabler for whistleblowers, but not necessarily a game-changing enabler. Note that all the truly big-effect whistleblowers throughout recent modern history have done just fine getting their stories broken by fact-digging journalists. WikiLeaks wasn't needed back then, so is WikiLeaks really needed now to accomplish the leaks that really matter?

The founder of WikiLeaks, Julian Assange, said something to the effect that their goal is to blast leaked information as far and wide as possible to have the most significant impact possible. Certainly, it makes for a lot of fascinating reading and public outrage about activities in the Middle East, etc, but there's nothing that historians would care to discuss 50 years from now. Of course, maybe that will change. But overall, you could say that Category 3 & 4 scandals need WikiLeaks, because they're not very impactful by themselves. However, if someone really wanted to anonymously go public with a Category 1 or 2 scandal, there are ways even if WikiLeaks is eradicated. This is because Category 1 & 2 scandals would sell themselves, and believe it or not, there was a time when journalism prided itself as being a bastion of watchdogs and investigations. I'll say it again: Category 3 & 4 scandals need WikiLeaks to matter, but Category 1 & 2 scandals don't. Correspondingly, this may be the strongest reason why WikiLeaks does not matter, except to serve a news-starved media and readership (or viewership).

I think that the most interesting outcome of this whole WikiLeaks thing was how Amazon and many other companies decided to turn against WikiLeaks, whether pushed by the government or by public opinion. Nick Carr has a nice summary of some stuff written by Newsweek COO Joseph Galarneau. Amazon has demonstrated some unsettling powers for censorship that could affect how the media reports on leaked information if they publish/present their media via 3rd-party technology platforms. Now that is interesting and unexpected. However, not unprecedented, given the amount of censorship control the UK and Chinese governments appear to have over their own media.

Update: An excellent piece that was shared by Minna Van. This quote (quoted below) really stands out. Interesting, if true, journalism is no longer a bastion of watchdogs and investigations? Or perhaps it's not a big deal. I'm curious as to how much Ellsberg's stuff was redacted when he leaked his stuff.

"Referring to the efforts by news organisation such as the New York Times to consult with the government on which areas of the documentation to redact, Benkler added that ‘The next Daniel Ellsberg [who leaked the Pentagon Papers to the New York Times] would not risk their career, or their liberty, going to the New York Times’."

Who is PakG1?

I'm a Vancouver Canuck fan now living across the pond in China. My interests include disruption, global trends, Go (also known as Baduk or Weiqi), information asymmetry, games, innovation, languages, reading, skiing, and volunteering.